Funding

Heat Pump Funding in Scotland: Grants, Loans and Support in 2025

Discover heat pump funding in Scotland for 2025. Explore grants, loans, and support for homeowners, social landlords, new builds, heat networks, and public sector projects.
Katie Maundrell
  • 6 min read

Switching to a What is a Ground Source Heat Pump?Ground Source Heat Pumpsground source heat pump in Scotland can lower energy bills, cut carbon emissions, and improve home comfort. A range of Scottish Government funding programmes makes the transition to renewable heating more affordable for For Your HomeHomeshomeowners, Solutions for social housingSocial Housingsocial landlords, Housing DevelopmentsHousing Developmentsdevelopers, and the Solutions for non-domesticPublic and Commercialpublic sector.

This guide explains the funding available in Scotland in 2025, who is eligible, how much you can claim, and why these schemes are so important in tackling fuel poverty and meeting net zero targets.

Policy Context: Heat in Buildings Strategy (2021)

Scotland’s Heat in Buildings Strategy, published in October 2021, sets the roadmap for decarbonising heat across homes and non-domestic buildings. It underpins all current funding schemes.

Key commitments include:

  • £1.8 billion investment during the current parliament to support zero-emission heat and energy efficiency measures.
  • Converting over 1 million homes and 50,000 non-domestic buildings to zero-emission heating systems by 2030.
  • Ensuring all new buildings use zero-direct-emission heating from April 2024 (delivered via the New Build Heat Standard).
  • Setting a target for most homes to reach EPC C by 2030/33.
  • Creating a Green Heat Finance Task Force to drive delivery and funding innovation.

This Strategy provides the long-term framework within which schemes like Home Energy Scotland, SHNZF, SHNF, and GPSEDS operate.

Support for Homeowners to decarbonise in Scotland

Home Energy Scotland Grant and Loan

The Home Energy Scotland Grant and Loan offers financial support for installing renewable heating systems, including ground source heat pumps.

  • Up to £7,500 grant for most homes
  • Up to £9,000 grant for rural and island properties
  • An optional interest-free loan of up to £7,500, which can be combined with the grant
  • Open to owner-occupiers and some private landlords

Maximum potential funding: Up to £16,500 for rural and island homes.

Scheme period: Open now with funding levels reviewed annually.

Eligibility: You must meet Home Energy Scotland’s application criteria, which include property ownership and proof that the system meets technical requirements.

Note: The Boiler Upgrade schemeFundingBoiler Upgrade Scheme (BUS), available in England and Wales, is not available in Scotland.

Why this matters:
In 2023, 34% of Scottish households were in fuel poverty, and 19.4% were in extreme fuel poverty that’s around 861,000 homes. Rural and island communities face even higher rates due to higher heating costs and limited fuel options.

Heat Pump funding for Social Housing providers in Scotland

Social Housing Net Zero Heat Fund (SHNZHF)

The Social Housing Net Zero Heat Fund helps registered social landlords decarbonise existing housing stock by installing zero-emission heating systems.

Scheme period: This scheme opened in 2020 and runs until March 2026, subject to available budget with future continuation subject to Scottish Government review.

  • Funds up to 60% of capital expenditure
  • Maximum grant: £5 million per project or £35,000 per property
  • Uplift: +11% for rural areas, +22% for remote rural areas
  • Open to Registered Social Landlords and Local Authorities across Scotland
  • Consortium applications allowed, with a lead applicant responsible for delivery

Why this matters:
Fuel poverty rates in the social housing sector are significantly higher than in the private sector. 61% of social sector households are fuel poor, compared to 25% in the private sector. Extreme fuel poverty affects 32% of social sector households in Scotland.

Funding for Heat Networks and Communal Heating in Scotland

Scotland’s Heat Network Fund (SHNF)

Scotland’s Heat Network Fund supports large-scale heat network projects, including networked ground source heat pumps.

Scheme period: Launched in February 2022 and runs until 2026, with future continuation subject to Scottish Government review.

  • £300 million fund
  • Capital grants cover up to 50% of eligible project costs
  • Open to local authorities, registered social landlords, community groups, charities, and private developers

Supports:

  • District heat networks
  • Communal heating systems
  • Shared ground loop heat pump networks

Fund objectives:

  • Reduce emissions and fuel poverty
  • Build a resilient Scottish supply chain
  • Deliver renewable heat
  • Enable a flexible, stable energy network

Current context:
Only 2% of Scotland’s heat is supplied by heat networks, but the Heat Networks (Scotland) Act 2021 sets ambitious growth targets.

Example

Take a look at our project in Renfrewshire Council – Scotland’s Largest Networked Heat Pump Retrofit For A Local AuthorityCase StudyPaisley with Renfrewshire Council to see the funding in practice.

Support for New-Build Developments in Scotland

New Build Heat Standard (NBHS)

Since 1 April 2024, the New Build Heat Standard requires that all new buildings in Scotland use zero-direct-emission heating systems. Gas and oil boilers are no longer permitted in new homes.

This regulatory change makes heat pumps the default heating option for Low carbon heating and cooling for new housing developmentsProudly partnering with GTCnew-build developments.

The New Build Heat Standard in Scotland is one of the most ambitious regulatory changes in the UK. Unlike the Future Homes Standard 2025: what it means for developers, planners, residents and the UK's heating future Future Homes Standard & Building Regulation Changes 2025Future Homes Standard, which comes into effect in England and Wales from 2025 and sets carbon performance targets that indirectly remove fossil-fuel heating, the NBHS makes an explicit requirement: all new buildings must use zero-direct-emission heating from April 2024.

In practice, this means heat pumps and heat networks are now the default heating solutions for new developments in Scotland.

Funding for Developers

While there are no direct homeowner-style grants for individual new builds, developers may access funding in two ways:

  • Heat networks in new developments where a communal or district solution is planned may be eligible for support from Scotland’s Heat Network Fund (SHNF).
  • Public sector-led new builds – May qualify under the Green Public Sector Estate Decarbonisation Scheme (GPSEDS) (see below).

Support for decarbonising Public Sector Buildings in Scotland

Scottish Public Sector Energy Efficiency Loan Scheme (SPSEELS)

As part of the Scottish Green Public Sector Estate Decarbonisation Scheme, the Scottish Government is offering funding to eligible public bodies in Scotland via the Scottish Public Sector Energy Efficiency Loan Scheme.

SPSEELS supports the decarbonisation of public sector buildings, including schools, NHS sites, local authority buildings, and emergency services.

Scheme period: SPSEELS is open for applications for this financial year 25/26.

  • Funding options include:
  • Zero-interest loans
  • Loans can cover up to 75% of the total project costs

The fuel poverty challenge in Scotland

Funding schemes like HES, SHNZHF and SHNF are critical because fuel poverty remains a widespread issue.

How Kensa can help in Scotland

Kensa has extensive experience in delivering funded heat pump projects in Scotland, from individual home retrofits to large-scale, A decarbonisation solution for over 60% of UK homesNetworked Heat Pumpsnetworked ground source systems.

We work with:

  • Homeowners applying for Home Energy Scotland support
  • Social landlords accessing SHNZHF grants
  • Local authorities and developers delivering SHNF-backed heat networks
  • Housebuilders and developers designing new-build projects that comply with the New Build Heat Standard, ensuring all new homes are fitted with zero-direct-emission heating

Our Shoebox NXProductShoebox NX and shared ground loop solutions are ideal for both single properties and multi-building projects, whether retrofit, new build, or public estate decarbonisation. They help cut carbon, lower bills, and improve comfort.

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